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1. Company Snapshot

1.a. Company Description

The Marcus Corporation, together with its subsidiaries, owns and operates movie theatres, and hotels and resorts in the United States.It operates in two segments, Theatres, and Hotels and Resorts.The Theatres segment operates multiscreen motion picture theatres, as well as Funset Boulevard, a family entertainment center.


The Hotels and Resorts segment owns and operates full-service hotels and resorts, as well as manages full-service hotels, resorts, and other properties.The company also provides hospitality management services, including check-in, housekeeping, and maintenance for a vacation ownership development.As of December 30, 2021, it owned or operated 1,064 screens at 85 movie theatre locations in 17 states under the Marcus Theatres, Movie Tavern by Marcus, and BistroPlex brands; and operated 8 wholly-owned or majority-owned hotels and resorts, as well as managed 11 hotels, resorts, and other properties for third parties.


The company was founded in 1935 and is headquartered in Milwaukee, Wisconsin.

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1.b. Last Insights on MCS

The Marcus Corporation's recent performance was negatively impacted by its Q3 earnings miss, with earnings of $0.42 per share, falling short of the Zacks Consensus Estimate of $0.43 per share. This represents a decline from earnings of $0.78 per share in the same period last year. The company's hotels and resorts segment delivered revenue growth, but faced a tough comparison to the prior year's quarter, which benefited from the Republican National Convention. A leadership transition in its theatre segment also occurred.

1.c. Company Highlights

2. The Marcus Corporation's Mixed Quarter: A Closer Look

The Marcus Corporation reported a mixed quarter with consolidated revenues of $210 million, down 9.7% compared to the prior year quarter. Operating income was $22.7 million, a decrease of $10.1 million. Consolidated adjusted EBITDA was $40.4 million, a decrease of $11.9 million. Net earnings were $16.2 million or $0.52 per share, favorably impacted by a non-recurring gain on a property insurance settlement of $3 million or $0.10 per share. The actual EPS came out at $0.42 relative to estimates at $0.43.

Publication Date: Nov -29

📋 Highlights
  • Consolidated Revenue Decline: Revenues fell 9.7% to $210 million, driven by underperforming theaters and lower film attendance (-15.8%) and attendance (-18.7%).
  • Operating Income Drop: Operating income slid $10.1 million to $22.7 million, with theaters contributing a 33% adjusted EBITDA decline to $22.1 million.
  • Hotel Division Resilience: Hotels grew revenue 1.7% to $80.3 million, outperforming competitors by 5.2% in RevPAR despite flat adjusted EBITDA.
  • 2026 Film Slate Strength: 4 upcoming films (e.g., Spider-Man, Super Mario) are predecessors to over $500M domestic grossers, vs. 1 in 2025, boosting growth expectations.
  • Capital Allocation Focus: $9.1 million in share repurchases and $214 million liquidity support shareholder returns, alongside $75–85 million 2025 CapEx for asset reinvestment.

Theater Division Performance

The theater division saw a 16% decrease in total revenue to $119.9 million, primarily due to weaker performances from top films. Comparable theater admission revenue decreased 15.8%, and attendance decreased 18.7%. Adjusted EBITDA was $22.1 million, a 33% decrease. However, the company is optimistic about its growth prospects, particularly with a strong slate of films in 2026, including franchise films like Mario Brothers, Toy Story, Minions, Moana, and Jumanji.

Hotels and Resorts Division Performance

The hotels and resorts division reported a 1.7% increase in total revenues to $80.3 million. RevPAR for comparable owned hotels decreased 1.5%, but the hotels outperformed the competitive set by 5.2 percentage points. Adjusted EBITDA was essentially flat. The division's performance was driven by strong average daily rates and occupancy growth, with 2 of the newly renovated properties, Grand Geneva Resort & Spa and Pfister hotel, benefiting from investments in renovations.

Valuation and Growth Prospects

Analysts estimate next year's revenue growth at 5.3%. The company's current valuation metrics include a P/E Ratio of 64.27, P/B Ratio of 1.09, and EV/EBITDA of 10.14. With a strong film slate and investments in its hotels, the company is well-positioned for growth. The company's capital allocation strategy focuses on reinvesting in its assets, with a maintenance CapEx budget of $50 million to $55 million for next year.

Future Outlook

The company expects significant growth in free cash flow in 2026 due to lower CapEx. The company's operating leverage in theaters has historically contributed around 50% to the bottom line in top-line growth. EBITDA growth is expected to flow through with top-line growth, assuming the hotel business continues steadily. With a strong balance sheet and a target leverage ratio of 2.25% to 2.5%, the company is comfortable taking on leverage to pursue M&A opportunities.

3. NewsRoom

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Cinema Stocks Drop After Netflix Suggests Shorter Theatrical Releases Following Warner Bros. Acquisition

Dec -05

Source: forbes.com

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Classic Holiday Favorites Return to the Big Screen at Marcus Theatres

Dec -05

Source: businesswire.com

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Jyong Biotech Expands Regional Partnerships, Signs MOU with a Vietnam Pharmaceutical Distributor for MCS‑2 Market Entry

Dec -04

Source: globenewswire.com

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H.I.S. (OTCMKTS:HISJF) vs. Marcus (NYSE:MCS) Financial Comparison

Nov -30

Source: defenseworld.net

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Marcus & Millichap: Cautious Optimism As Q3 2025 Gets Out Of The Red

Nov -25

Source: seekingalpha.com

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Wicked: For Good Delivers Magical Weekend at Marcus Theatres

Nov -24

Source: businesswire.com

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Jyong Biotech Ltd. Signs Non‑Binding Letter of Intent with Leading South Korean Pharmaceutical Company to Evaluate In‑Licensing of Plant-Derived MCS Drugs

Nov -24

Source: globenewswire.com

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Jyong Biotech Announces Completion of Primary Endpoint Statistical Analysis for Phase II Clinical Trial of MCS-8 With Positive Outcomes

Nov -20

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.30%)

6. Segments

Theatres

Expected Growth: 4.2%

The 4.2% growth in Theatres segment of The Marcus Corporation is driven by increasing demand for premium formats like UltraScreen and Dolby Cinema, strategic pricing initiatives, and a strong slate of blockbuster releases. Additionally, investments in comfort and convenience upgrades, such as recliner seating and food and beverage offerings, have enhanced the overall customer experience, driving attendance and revenue growth.

Hotels/Resorts

Expected Growth: 4.5%

The 4.5% growth in Hotels/Resorts segment of The Marcus Corporation is driven by increasing demand for luxury accommodations, strategic expansion into new markets, and investments in property renovations and amenities. Additionally, the company's focus on providing exceptional customer experiences, loyalty programs, and effective revenue management practices contribute to the segment's growth.

Corporate Items

Expected Growth: 3.8%

The Marcus Corporation's 3.8% growth in Corporate Items is driven by increasing hotel revenues, improved operating margins, and strategic cost savings initiatives. Additionally, the company's focus on renovating and rebranding its properties, as well as its expansion into new markets, contributes to its growth momentum.

7. Detailed Products

Theatres

Marcus Theatres is a leading theatre circuit in the United States, operating 1,098 screens at 90 locations in 17 states.

Hotels and Resorts

Marcus Hotels & Resorts owns and manages a portfolio of 19 hotels, resorts, and other properties across the United States, offering a range of accommodations and amenities.

Restaurants and Bars

Marcus Restaurants owns and operates a range of restaurants and bars, including fine dining establishments, casual eateries, and bars and lounges.

8. The Marcus Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for The Marcus Corporation is medium due to the presence of alternative forms of entertainment and leisure activities.

Bargaining Power Of Customers

The bargaining power of customers for The Marcus Corporation is low due to the lack of concentration of buyers and the high switching costs.

Bargaining Power Of Suppliers

The bargaining power of suppliers for The Marcus Corporation is medium due to the moderate concentration of suppliers and the availability of alternative suppliers.

Threat Of New Entrants

The threat of new entrants for The Marcus Corporation is high due to the low barriers to entry and the attractiveness of the industry.

Intensity Of Rivalry

The intensity of rivalry for The Marcus Corporation is high due to the high concentration of competitors and the high stakes of competition.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 28.49%
Debt Cost 4.91%
Equity Weight 71.51%
Equity Cost 11.37%
WACC 9.53%
Leverage 39.84%

11. Quality Control: The Marcus Corporation passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Sinclair Broadcast Group

A-Score: 5.4/10

Value: 7.2

Growth: 4.4

Quality: 4.5

Yield: 10.0

Momentum: 3.0

Volatility: 3.3

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Marcus

A-Score: 4.8/10

Value: 7.4

Growth: 4.0

Quality: 4.6

Yield: 3.0

Momentum: 4.0

Volatility: 6.0

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AMC Networks

A-Score: 4.5/10

Value: 9.8

Growth: 3.1

Quality: 4.9

Yield: 0.0

Momentum: 6.0

Volatility: 3.3

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Gaia

A-Score: 3.8/10

Value: 5.7

Growth: 4.0

Quality: 4.7

Yield: 0.0

Momentum: 6.0

Volatility: 2.7

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LiveOne

A-Score: 3.8/10

Value: 9.6

Growth: 6.8

Quality: 4.0

Yield: 0.0

Momentum: 1.5

Volatility: 1.0

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Dave & Buster's

A-Score: 3.1/10

Value: 6.3

Growth: 5.9

Quality: 3.3

Yield: 0.0

Momentum: 1.0

Volatility: 2.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

15.08$

Current Price

15.08$

Potential

-0.00%

Expected Cash-Flows